Nokia Mobile Phone Plans: ‘It’s Complicated’ But Really It’s Not
Ok, Nokia (NOK), what’s it going to be on mobile phone manufacturing? Are you coming back or staying out? For now, Nokia’s answer is: “It’s complicated.”
Actually, it’s pretty straightforward. The company’s newest statement merely reiterates what it’s been saying since November, 2014.
Here’s all you need to know: Starting late in 2016, Nokia will license its brand to mobile device OEMs. There, that’s not so difficult to grasp, is it? If you like, here’s more…
At the end of Q3 next year Nokia will be free of legal constraints from its Microsoft (MSFT) deal to license its brand for others to use. If you recall, the iconic Finnish manufacturer finalized the sale of its handset business to Microsoft in April, 2014 for $7.1 billion, which the software giant took and, well, kind of did nothing with, just last week laying off 7,800 mostly mobile phone employees, taking a $7.6 billion write-off related to the purchase and effectively gutting the business.
Now Nokia again let on it’s thinking hard about coming back to the handset business. The company offered up its longest statement yet on the rumors of its re-entry, saying that although it’s currently focused on mobile networking and mapping, brand licensing ultimately is its best option to return to the mobile wars.
“The right path back to mobile phones for Nokia is through a brand-licensing model,” a Nokia spokesperson wrote in a new note posted on the vendor’s website. “That means identifying a partner that can be responsible for all of the manufacturing, sales, marketing and customer support for a product…We will look for the right partner who can take on the heavy lifting and work closely with us to deliver a great product. “
See, it’s not really all that complicated. And, Nokia’s already said as much not once but twice. In late June, Nokia chief executive Rajeev Suri said the company “will look for suitable partners…We would simply design them and then make the brand name available to license.”
And, the previous November, Sebastian Nystrom, Nokia Technologies product head, said that once the vendor is legally unencumbered to license its handset technology to others, it “would be crazy not to look at that opportunity. Of course we will look at it.”
Along the way, Nokia repeatedly has denied reports it intends to make its own branded smartphones, three months ago posting a note on its website to that effect: “Nokia reiterates it currently has no plans to manufacture or sell consumer handsets.”
Here’s the full text of Nokia’s new statement on the matter:
For 14 years Nokia was the biggest cell phone maker in the world, and the brand became a household name — one that evoked quality, innovation and human connection. The brand is still recognized that way by millions of people around the world, which is incredibly gratifying and a huge compliment for the people who helped create it. So it’s not surprising that today, the question comes up all the time: will Nokia return to mobile devices?
The answer is: it’s complicated.
Let’s take it from the top. As you probably know, we sold essentially all of our Devices & Services business to Microsoft in April 2014. With it went all of the enormous manufacturing, marketing and channel distribution capabilities you need to be in the business of making & selling phones.
The Nokia that exists today remains focused on the connected world, through mobile network infrastructure, location & mapping services, and technology development & licensing. We also aim to continue bringing our iconic design capabilities and technology innovation to the mobile space, and in the form of amazing products people can someday hold in their hands. However, we’ll do it in a completely different way from before.
The right path back to mobile phones for Nokia is through a brand-licensing model. That means identifying a partner that can be responsible for all of the manufacturing, sales, marketing and customer support for a product.
If and when we find a world-class partner who can take on those responsibilities, we would work closely with them to guide the design and technology differentiation, as we did with the Nokia N1 Android tablet. That’s the only way the bar would be met for a mobile device we’d be proud to have bear the Nokia brand, and that people will love to buy.
To summarize, we will look for the right partner who can take on the heavy lifting and work closely with us to deliver a great product. As we agreed with Microsoft, the soonest that could happen is Q4 2016 — so it’s safe to say Nokia won’t be back (at least in phone form…) before then.